Target 2008 Annual Report Download - page 71

Our measure of profit for each segment is a measure that management considers analytically useful in
measuring the return we are achieving on our investment.
Business Segment Results 2008 2007 2006
Credit Credit Credit
(millions) Retail Card Total Retail Card Total Retail Card Total
Sales/Credit card revenues $62,884 $2,064 $64,948 $61,471 $1,896 $63,367 $57,878 $1,612 $59,490
Cost of sales 44,157 — 44,157 42,929 — 42,929 40,366 — 40,366
Bad debt expense (a) — 1,251 1,251 — 481 481 — 380 380
Selling, general and administrative/
Operations and marketing
expenses (a) (b) 12,838 474 13,312 12,557 469 13,026 11,745 434 12,179
Depreciation and amortization 1,808 17 1,826 1,643 16 1,659 1,481 15 1,496
Earnings before interest expense and
income taxes 4,081 322 4,402 4,342 930 5,272 4,286 783 5,069
Interest expense on nonrecourse debt
collateralized by credit card receivables — 167 167 — 133 133 — 98 98
Segment profit $ 4,081 $ 155 $ 4,236 $ 4,342 $ 797 $ 5,139 $ 4,286 $ 685 $ 4,971
Unallocated (income)/expense:
Other interest expense 727 535 499
Interest income (28) (21) (25)
Earnings before income taxes $ 3,536 $ 4,625 $ 4,497
(a) The combination of bad debt expense and operations and marketing expenses within the Credit Card Segment represent credit card
expenses on the Consolidated Statement of Operations.
(b) New account and loyalty rewards redeemed by our guests reduce reported sales. Our Retail Segment charges the cost of these
discounts to our Credit Card Segment, and the reimbursements of $117 million in 2008, $114 million in 2007 and $109 million in 2006
are recorded as a reduction to SG&A expenses within the Retail Segment and an increase to operations and marketing expenses
within the Credit Card Segment.
Note: The sum of the segment amounts may not equal the total amounts due to rounding.
Total Assets by Business Segment 2008 2007
Credit Credit
(millions) Retail Card Total Retail Card Total
Total assets $35,651 $8,455 $44,106 $36,306 $8,254 $44,560
Substantially all of our revenues are generated in, and long-lived assets are located in, the United States.
Due to the seasonal nature of our business, fourth quarter operating results typically represent a
substantially larger share of total year revenues and earnings because they include our peak sales period
from Thanksgiving through the end of December. We follow the same accounting policies for preparing
quarterly and annual financial data. The table below summarizes quarterly results for 2008 and 2007:
Quarterly Results First Quarter Second Quarter Third Quarter Fourth Quarter Total Year
(millions, except per share data) 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007
Total revenues $14,802 $14,041 $15,472 $14,620 $15,114 $14,835 $19,560 $19,872 $64,948 $63,367
Earnings before income taxes 957 1,064 1,003 1,113 633 781 943 1,665 3,536 4,625
Net earnings 602 651 634 686 369 483 609 1,028 2,214 2,849
Basic earnings per share (a) 0.75 0.76 0.82 0.81 0.49 0.57 0.81 1.24 2.87 3.37
Diluted earnings per share (a) 0.74 0.75 0.82 0.80 0.49 0.56 0.81 1.23 2.86 3.33
Dividends declared per share 0.14 0.12 0.16 0.14 0.16 0.14 0.16 0.14 0.62 0.54
Closing common stock price
High 54.89 64.32 55.10 70.14 57.89 67.57 41.35 60.13 57.89 70.14
Low 48.50 58.58 43.68 57.31 32.69 58.11 26.96 48.08 26.96 48.08
(a) Per share amounts are computed independently for each of the quarters presented. The sum of the quarters may not equal the total
year amount due to the impact of changes in average quarterly shares outstanding.
Note: The sum of the quarterly amounts may not equal the total year amounts due to rounding.
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PART II
29. Quarterly Results (Unaudited)